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US Dollar Update: Nailed It…Again…
In this video update we revisit the US Dollar Index (UUP) as it has been under heavy pressure. Just recently it tested the key $24 level which was the 2016 low and a level we said would get tested based on a simple and objective method. In this video you will: Hear the analysis that got us to this point See how you could have made money off the bottom Find out where this is headed next
Continue Reading -->The Red Dog’s Roadmap
The SPX futures are up 2 ahead of the Fed this afternoon. It has been a methodical move since clearing the descending channel above 2430 to take out 2453 before making a new all-time high at 2481. Now we’ll look to see if the active bulls stay in control with upper support at 2464 and yesterday’s low at 2474. IWM gave another calculated entry Monday after it reclaimed $142.25 and cleared $143.55 to hit a hgih of $144.25. It will need to hold $143.21 to keep active bulls happy and, if it can, extend another day towards a target of $145. XLE is trying to stay relevant as some are long vs the $64.50 stop while others want to see if hold the 50day of $65.86. IBB has its first bearish engulfing candle in a while and I did tweet that I sold around $329.50. After this move from $310, some digestion makes sense. Look for banks to be in play on fed day as JPM had a nice 2 day move. If it is able to hold the $92 area, I will be looking for it to make a move towards all-time highs in the days ahead.
Continue Reading -->US Dollar – Nailed It! What’s Next?
Last week I talked about why the CPI report was not the main reason for the dollar decline and that we would see continued follow through lower. In this video I discuss: What to expect now that the target area has been reached A look forward to how the FOMC may impact the dollar next week Why price may be headed to test the 2011 low
Continue Reading -->Why The US Dollar Continues to Fall
It has been a while since I provided the last update on my standing call that the US Dollar is headed towards the $24.50 level. So, with the NFP report released earlier this morning it felt appropriate to provide an updated video with how everything is shaping up, especially considering the NFP report beat expectations. In this all-new video, I break down: The reaction to the NFP report Why $24.50 is such a key level that price is being drawn too How to take advantage of both the short and long term trend
Continue Reading -->5 Fast Facts About the Boring S&P 500
2017’s been a nutty year. It’s been a remarkably sleepy year, with the S&P 500 grinding up at a snail’s pace despite growing geopolitical tensions, stretched valuations, and an endless flurry of headlines out of Washington courtsey of President Trump. So I dumped 9,438 trading days worth of data — going back to January 3, 1980 — to give you a numbers-based breakdown of just how weird 2017 is. 1) 1% Days The S&P 500 has moved 1% or more in a day only 4 times in 2017. In 2016, we had 4 daily 1% moves by January 8! And before 2017, the market had 1% daily moves on average 63 times a year! 2) Up Days and Down Days In 2017, 54.7% of all trading days have been up days. While it’s felt like the market only goes up a little bit every day, this is only slightly above the pre-2017 average of 53.1%. 3) Intraday Volatility I calculate a day’s trading range with the following formula: High minus low, divided by the prior day’s close. So if the S&P had a 20-point difference between its high and low, and the prior day’s close was 2000, the range would be 1%. The average daily range in 2017 has been 0.6%. This is less than half the pre-2017 average of 1.3%. That means intraday movement is running at less than half the long-term average. 4) Average Daily Move On average, the S&P has moved only 0.3% per day in 2016. This is dramatically lower than the pre-2017 average of 0.8%. So if you’re falling asleep watching the major averages, you’re not alone. I write about the major averages every day, and my daily mission is now “find an interesting way to say nothing happened!” 5) Finishes Near the Highs of the Day For my final piece of analysis, I wanted to see if the S&P 500 has tended to finish closer to the highs of the day. So I looked for days where the S&P 500 finished in the top 1/3 of the daily range. (the high minus the low). We have had 106 trading days through Monday, and the S&P 500 finished in the top 1/3 of the range 54 times. That’s 51%. Pre-2017, the S&P finished in the top third of its range just 42% of the time. ******** The takeaways are simple: 1) The S&P 500 is not moving intraday 2) The S&P 500 is not moving day-to-day 3) Judging by the trend for us to finish near the highs, it doesn’t seem to pay to short the market intraday. 4) If you’re looking for action, focus on hot momentum stocks… not the indices and related ETF’s!
Continue Reading -->Feeding the Ducks?
An historic contraction in volatility this year cooked up a whack-a-mole stew of selling volatility. Every time the market got hit, it was just another Sunday at Church for the Buy the Dip Congregation. Lately, it seems like it’s Sunday every day. The bounce back from last Wednesday’s air pocket set the land speed record for baptism by fire with the market jackknifing back into safety before you could say Lazarus. Never underestimate the scent of a ‘free lunch’ to lure the best and brightest financial engineers on Wall Street, the only place where the caboose always is in front of the engine. In other words, it’s always the derivatives, leverage, and tangential strategies that drive the money train. You don’t make the billions the banks and hedgies do with plain vanilla. When a political snowball from hell rolled onto The Street last week with the SPX hovering just below all-time highs and option expiration just days away, players who sold volatility were in jeopardy of choking on their own free lunch strategies. So in the best tradition of a bull in a China shop, it looks like players had no choice but to throw a Hail Mary into the fray and put on a Squeeze Play beginning last Thursday. What better way to do this then to let Wednesday’s selling run its course and close on its low before jacking this 18-wheeler back up out of the blue. Well it wasn’t completely out of the blue. Mr. Geometry lent a hand with the SPX closing directly 90 degrees off the key 2401 level last Wednesday. While a week ago, all hell broke loose and it looked like the SPX would finally test the key 2280-2300 level or worse, today, the hall of mirrors at 2400 is back in play… again. This must be the 7th attempt to covert 2400. I’ve lost count. The action certainly speaks to the idea that ‘There’s Something About 2400′ as we flagged before March. Some think the bulls have run out of money with a Big Seller sitting on 2400, or that there’s a lot of hedging going on there. Maybe, but underneath the surface, a handful of ‘Nifty Fifty’ names have been ripping higher. These include our old friends AAOI, SHOP, LITE, TTD, PFPT, WDAY and IRBT as well as the runaway Chinese Brigade, WB, SINA and SOHU. If I owned a major fund, this would be my strategy: I’d keep the indices flat below a ceiling of say 2400 and buy my belly full of stocks, keeping the crowd in suspense and competition at bay as they sold each time the index kissed 2400, only to be rejected. Then I’d add to my longs on each pullback. Once and only once I was ready, I’d let the SPX vault 2400 and start feeding the ducks, distributing positions into the quacking now that the ‘coast was clear’. I’m just sayin’: if it looks like a duck and quacks like a duck… The bulls would love nothing more than to get a close meaningfully above 2400 going into the long weekend. With names like X creeping higher as flagged yesterday and IBM catching a bid this morning, and with energy names getting a lift from $50+ oil, the junkyard dogs may create enough of a tail wind to chase the SPX over 2400 into early June, where a possible time/price square-out is on the table. However, I’m not so sure a breakout is an all clear: if the SPX satisfies our long outstanding target over the next few weeks, the bite of the bear may ultimately prove worse than the bark of the bulls.
Continue Reading -->T3 Live Weekend Recap 4-22-17 | Trade Ideas & Trader Education
T3 Live Weekend Recap 4-22-17 | Trade Ideas-Trader EducationT3 Live Training Facility NYC-NYWhy SPY Could Hit New All-Time HighsIt was tough to see this one coming.After reversing to finish on the lows Wednesday, SPY gapped up Thursday morning. And following a small, quick pullback, it took off running higher straight through into the afternoon.It reclaimed the 20 day sma (234.71) — barely even pausing — and continued up above the 50 day sma (235.46). It settled into a relatively tight range above the 50 day sma for most of the afternoon but dropped right before the bell to finish a few cents underneath it. The move as on above average volume.So a week of bearish action was wiped out in one face-ripping rally. Reclaiming the moving averages was a big positive for the bulls. CONTINUE READING == >>How the 3-Bar Rule Can Help You Deal With Failed SetupsOur Trading the Pristine Method® Home Study Course teaches traders a unique approach to trading candlestick price patterns.What make it unique?It is 100% objective and systematic, and eliminates all guesswork from the buying and selling process. We teach identifiable patterns that stocks trade in, and then show the exact strategies of what to do in each stage of a stock’s movement, including how to enter, manage, and exit the trade.That said, not all trades work. No pattern makes money 100% of the time, and the failures must be watched for 3 reasons:1) To see and capitalize on a “new opportunity” when a pattern fails but immediately sets up again2) To know how best to manage a position before it fails by evaluating the charts objectively.3) To help you in disaster management mode in the event you are in a position that has failed. CONTINUE READING == >>Register Today | Rob SMith Webinar Monday April 24 | 4:30 PMRegister TodayQuant Edge Training: A New Way to Read Charts 4 Charts You Need to SeeThe market’s been stalling since the 3/1 gap up on Trump’s speech. And lately, we’ve been seeing weakness in the banks, even the ones reporting good earnings, which has traders worried about more downside. I discussed some of the key players like Bank of America (BAC) and Goldman Sachs (GS) this afternoon on CNBC’s Fast Money: So let’s take a step back and take a look at 4 key charts to get an idea of where we stand. 1) S&P Financial Sector ETF (XLF)I actually also appeared on Fast Money on March 22 to discuss XLF, which had lost momentum by breaking the 8 & 21 day moving averages.You can see the March 22 segment here: CONTINUE READING == >>Trader Training | 9 Tips for Picking the Right Stocks for Swing TradingAs a swing trader, one of the most important decisions you’ll every make is choosing which stocks to trade. You can learn all the winning setups in the world, but if you trade the wrong stocks, you’re going to lose money. So we’ve put together 9 simple tests that can help you steer clear of the ticking time bombs, and keep you focused on the winners. GET THE 9 TIPS HERE == >Is Prop Trading Right for You? Take Our FREE Quiz and Find Out! TAKE THE QUIZ Scott Redler: Market Thoughts Ahead of the French ElectionIt’s been a very choppy week.I wish I had more commitment to a direction, but I just don’t.Technicals are very mixed. The Oscillator is neutral, not oversold or overbought. SPX is almost smack in the middle of the range from the 2400 high to the 2322 low.We are close to reclaiming all the moving averages, but there’s no real conviction. Tech still shows relative strength.Small caps and banks had a bounce off recent support, but I’m not sure if they are out of the woods. Bios are still hanging in, but no one is paying up. XLE is still brokenRead Scott’s Game Plan for Next Week == >>Scott Redler Watch the Video Today | Duration 30:15GET THE NEW TRAINING PODCAST | T3 CEO Sean Hendelman Discusses the Future of Automated TradingOn March 15, 2017, Sean Hendelman, CEO and co-founder of T3 Live and T3 Trading Group, appeared on the Chat With Traders podcast hosted by Aaron Fifield. In this special interview, Sean discusses:How he got started as an investorImportant lessons he learned from losing moneyHow the automated trading space is evolvingThe challenges of latency-sensitive strategiesThe structure of T3 CompaniesJeff Cooper: The Bonfire of the Equities?In this today’s report, I couldn’t help but wonder whether investors/traders are giving short shrift to the idea of a big market event in the event of a Le Pen victory in France. After all, selling volatility and not buying insurance seems the smart move a la Brexit and the US election. Right? Maybe the very buying of insurance for those ‘non-events’ was one of the reflexive factors that perpetuated the rally phases following Brexit and the Trump Victory. Just because the house doesn’t burn down, you don’t cancel the fire insurance do you? I can’t help but wonder whether ‘wise guys’ are selling volatility here and that the 3rd time may be a charm for bears. History doesn’t always repeat of course, but we can learn a lot from it. CONTINUE READING == >>
Continue Reading -->Scott Redler Discusses the Market Complexion with CNBC
In yesterday’s Market Insider Column with Patti Domm on CNBC.com, T3 Live Chief Strategic Officer Scott Redler broke down yesterday’s weak market action in the aftermath of the release of the Fed’s March Meeting Minutes: The real test is whether the market will fall below and close below the 50-day moving average, which it hasn’t done since Election Day. That would be a signal the complexion has changed, and that would breed more caution,” said Scott Redler, partner with T3Live.com. Redler, who follows the market’s short-term technicals, said the dramatic reversal in the S&P 500 Wednesday may be a forewarning of more turbulence to come. “When you break key levels and hold them, it’s a constructive signal for the bulls. If you push above levels and it fails, it could give you some clues that there’s more weakness to come. The banks and small caps were giving clues even before the Fed said the market is quite high,” said Redler. Click here to read the full article on CNBC.com, which also includes commentary from market legend Art Cashin, who serves as director of floor operations at UBS.
Continue Reading -->Did Tim Cook and Elon Musk Pull a Trump on Trump?
The Business of America Is Business -Calvin Coolidge Donald Trump has made a fortune by selling his name. According to the Washington Post, Trump companies have made at least $59 million in revenue. Here’s one of the Washington Post’s examples: In Indonesia, Trump has licensed his name to two projects — a luxury resort and a golf course — for which he earned between $1 million and $5 million each project, each year. Now Apple (AAPL) CEO Tim Cook and Tesla (TSLA) CEO Elon Musk may be running the same game on Trump — selling their names in the name of business. The Washington Post reported that Trump is about to announce “The White House Office of American Innovation,” which is aimed at bringing fresh business-like thinking to Washington. Supposedly the office is already working with Cook, Musk, and Salesforce (CRM) CEO Mark Benioff. After the failure of the healthcare bill on Friday, Trump needs more credibility. Association with tech leaders like Cook and Musk gives him that. Dropping those names when introducing new legislation would be a huge selling point. And odds are, there will be some payback, especially since Trump seems to love everyone that sits down with him. Remember his January 31 meeting with pharma CEO’s? The talk about price controls seemed to dissipate pretty quickly. So what could Cook and Musk get out of Trump? Well, there’s a lot of chatter that having a big personal connection in the White House could help Apple make even more headway in the education market. But I think the real story is the potential repatriation of overseas cash. Apple’s sitting on $246 billion in cash, but $230 billion of it is sitting overseas doing nothing. Cook has said that he’s optimistic about some kind of tax reform including repatration this year, and buddying up with Trump can only help that process. As for Musk, I imagine that Trump could keep government subsidies flowing for electric cars. There’s also potential for some of Tesla’s non-car initiatives, like its energy story solutions, to make their way into Trump’s infrastructure package. And then there’s Solar City (SCTY), Musk’s solar panel company. I can’t imagine that company would hurt by ties to Trump. So Cook and Musk may have struck great deals. They’re selling their names to help Trump build credibility for business-related legislation. And their companies will probably collect big-time cash on the back end.
Continue Reading -->T3’s Take 3: Mr. Market Is Still Telling the Most Boring Story on Earth
1) What a Boring Market Stocks are still in sleep mode, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite showing next-to-none movement. The Russell 2000 fell -0.5% to 1384.09, and in today’s low volatility environment, that actually counts as major movement. Traders are still debating just how hawkish the Fed is following its statement last week. That’s driving continued profit-taking in the US dollar, which helped gold catch a bid. Regional banks, which have been key in the post-election rally, are still dropping, while US Treasuries perked up again. 2) Wait and See? We’ve been falling asleep for the past month as day-to-day movement has gone to basically nothing. The word on the street is that traders are waiting on Thursday’s healthcare vote before putting their chips down. However, throughout the year, we’ve seen plenty of big events — Trump’s inauguration, then his first address, jobs numbers, the ECB, Fed statements, etc. — and none have driven real volatility for more than a few hours. So my big concern is that we’ll see some fireworks on the healthcare vote, and then head right back into this low-volatility snoozefest. 3) But There’s This… This morning, Bloomberg News reported that the CBOE SKEW Index rose for 5 straight days, the longest streak since June 2016. This indicates that traders are paying up for out-of-the-money options, which only pay off in the face of a huge market move. According to Bloomberg, the last time the SKEW Index was so high relative to the VIX, the VIX surged 65%. However, before throwing your money at VIX calls, consider that we’re dealing with a sample size of 1 — that’s far from reliable.
Continue Reading -->